Global Landscape of Climate Finance 2023 (Climate Policy Initiative)

Summary

• Average annual climate finance flows reached almost USD 1.3 trillion in 2021/2022, nearly doubling from 2019/2020, driven by mitigation finance up by USD 439 billion.p.4
• Current climate finance flows represent only about 1% of global GDP.p.4
• Annual climate finance needs rise from $8.1 to $9 trillion through 2030, then exceed $10 trillion each year from 2031 to 2050.p.5
• Public actors committed an annual average of USD 640 billion in 2021/2022, approximately half of the total, up 91% from USD 335 billion in 2019/2020.p.17
• Private actors provided 49% of climate finance, averaging USD 625 billion in 2021/2022 compared to USD 318 billion in 2019/2020.p.21
• Adaptation finance reached an all-time high of USD 63 billion, growing 28% from 2019/2020, against needs of USD 212 billion per year by 2030 for developing countries.p.8
• Solar PV received USD 251 billion and onshore wind USD 131 billion, while an estimated USD 925 billion went to new fossil fuels in 2021/2022.p.25

Key insights

1. China, the US, Europe, Brazil, Japan and India received 90% of the increased climate funds.p.7
2. East Asia and the Pacific, the US and Canada, and Western Europe account for a combined 84% of total climate finance.p.8
3. China's domestic climate finance mobilization accounted for 51% of all domestic climate finance globally.p.8
4. Household spending reached 31% of all private climate finance, driven by EV sales.p.9
5. Development finance institutions channel 57% of all public climate finance.p.9
6. MDBs on average crowd in private finance of only about 1.2 times the resources they commit.p.20
7. Mitigation received 91% of total climate finance in 2021/2022.p.23
8. Low-carbon transport finance reached an all-time high of USD 334 billion per year, 29% of mitigation finance.p.26
9. Global hydrogen investment is estimated at USD 1 billion in 2022 compared to annual needs of USD 80 billion through 2050.p.28